CHICAGO TRANSIT AUTHORITY

Federal Transit Administration

(FTA) Overall DBE Goal-Setting

Methodology for FFY 2019-2021

Table of Contents

Goal Overview and Methodology....................................................................................................2

Step 1: Base Figure Calculation..........................................................................................3

Step 2: Adjusting The Base Figure.......................................................................................5

Final Step: Calculating The Overall Goal...........................................................................5

Published Public Notices.................................................................................................................9

Email for the Scheduled Assist Agencies Conference Call...........................................................14

Public Comment Open House Flyer..............................................................................................16

Public Comment Open House Attendance Sheets.........................................................................17

Public Comments.......................................................................................................................... 21

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CHICAGO TRANSIT AUTHORITY (CTA) DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM

Goal Setting Methodology and Calculations

Federal Fiscal Years (FFY) 2019, 2020 & 2021 (October 1, 2018 through September 30, 2021)

Submittal Date October 10, 2018

CHICAGO TRANSIT AUTHORITY (CTA) DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM

Goal Setting Methodology and Calculations

Federal Fiscal Years (FFY) 2019, 2020 & 2021 (October 1, 2018 through September 30, 2021)

Submittal Date October 10, 2018

GOAL OVERVIEW Pursuant to the U.S. Department of Transportation (DOT) rules and regulations provided in 49 CFR Part 26 (DBE Regulations), the CTA proposes an overall DBE goal that is applicable to the CTA’s DOT-assisted contracting opportunities (excluding the purchase of transit vehicles) for FFY 2019 through 2021. For those federal fiscal years, the CTA projects to spend a total of $253,129,402 of FTA funds (see Table 1 for the breakdown of anticipated FTA funds by work category). The proposed overall goal for DBE participation is 26% or $65,813,645 of the projected FTA funds that will be subject to DBE participation requirements as demonstrated by the calculation show below. 26% (Projected DBE goal) x $253,129,402 (Total CTA federally-funded capital budget excluding transit vehicle purchases) = $65,813,645.

USDOT-ASSISTED CONTRACTING PROGRAM FOR FFY 2019 - 2021

The CTA has adopted a comprehensive transit improvement plan that will provide faster, more comfortable and more reliable transportation services for our customers throughout the service area, which supports the CTA’s overall mission to deliver quality, affordable transit services that link people, jobs and communities. This plan, however, is not as robust as past plans due to the lack of a current state capital program. The last capital bill that the State of Illinois passed was in 2009, which CTA used to improve infrastructure, technology, and rolling stock. The CTA is currently conducting a disparity study to review its DBE program, which is scheduled to be completed in November 2018. The CTA will review the results of the disparity study and submit an amended goal if necessary.

Capital projects included among the FFY 2019 - 2021 work categories: • General Engineering Consultant Services on various contracts • Red Line Extension Program Manager • Construction Management Consultant Services on various contracts

Table 1 GOAL METHODOLOGY

Pursuant to Section 26.45(b), the overall goal must be based upon demonstrable evidence of relative availability of DBEs in the CTA’s geographic and product markets. Accordingly, the CTA proposes an overall goal for DBE participation that is consistent with the CTA's historical spending patterns and with the amount of DBE participation the CTA expects to achieve in its local market. The following sections, and the accompanying tables, explain the process that was followed to calculate the 26% proposed overall DBE goal for FFY 2019-2021. The CTA is currently conducting a disparity study analyzing the CTA’s federally-funded capital spending for FFY 2012-2017. The CTA will use the disparity study to amend its overall goal for FFY 2019-2021 if the results of the study warrant it. The majority of the CTA’s vendor pool is located in Cook County, therefore the CTA determined Cook County to be its local market.

STEP ONE: BASE FIGURE CALCULATION

Section 26.45(c) requires the measurement of ready, willing and able businesses in the CTA’s local market, using the best available evidence to derive a fair and accurate base figure that represents the percentage of DBEs. One of the methods recommended in the DBE Regulations for determining the base figure involves accessing information from DBE Directories and Census Bureau Data (§26.45(c)(1)). The following describes the base figure calculation based on these sources.

The CTA determined the number of ready, willing and able DBEs in our local market by identifying the DBE businesses in the Illinois Unified Certification Program (IL UCP) DBE Directory including their North American Industrial Classification Codes (NAICS) representing the work most likely required on CTA projects for FFY 2019-2021. The CTA identified the relevant NAICS codes to apply to the FFY 2019-2021 capital projects by reviewing the majority of the CTA projects funded by the CTA’s current (FFY 2016-2018) federally-funded capital budget. Utilizing the Census Bureau’s County Business Pattern (CBP) the CTA identified available DBE and non-DBE firms in its local market with those same NAICS codes. This allowed CTA to determine available firms that could serve as potential vendors. The number representing all DBEs and the number representing all firms were then used to determine the percentage of ready, willing and able “DBE firms to all firms” ratio for each NAICS code category (see Table 2).

Work Category Estimated Dollar Value Percent of Federal Funding by Work

Category

Construction $10,015,810 4.0% Professional Services 228,506,143 90.3% Supplies 14,607,449 5.7% Total $253,129,402 100.0%

Table 2: Base Figure Calculation

A B C D E F

NAICS Code Category

DBE Firms/ Firms Ratio based on

NAICS Code

Estimated Value of Work

Estimated Percentage

of Work

Weighted x DBE Firms Ratio

2379 Railway Construction(Interlocking,roadbed, sign, track) 38.0% $900,000 0.4% 0.1%

2381 Concrete 22.6% $600,000 0.2% 0.1% 2382 Electrical Contractors 3.2% $214,700 0.1% 0.0% 2382 Plumbing,HVAC, 1.5% $4,139,212 1.6% 0.0% 2383 Finishes 5.2% $3,362,122 1.3% 0.1% 2389 Specialty Trade Contractors 6.9% $399,776 0.2% 0.0% 3212 Wood, Plastic and Composites 0.7% $2,511,278 1.0% 0.0% 3231 Commercial Printing 0.9% $100,000 0.0% 0.4%

3359 Misc. Electrical Euip. & Component Manufaturing 7.7% $8,200,000 3.2% 0.2%

4231 Automobile Wholesalers 0.4% $1,440,000 0.6% 0.0% 4236 Electical Equip Wholesalers 6.0% $160,000 0.1% 0.0% 4234 Specialties 3.2% $2,296,171 0.9% 0.0% 4841 General Freight Trucking, Local 1.3% $401,238 0.2% 0.0% 5112 Utility Software 0.3% $209,100 0.1% 0.0% 5413 Professional Services (DoR, CM PM) 28.0% $224,525,100 88.7% 24.8% 5413 Testing Laboratories 12.7% $750,000 0.3%

5412 Accountants' (i.e., CPAs) offices, certified public 0.7% $252,332 0.1% 0.0%

5415 Computer software consulting services or consultants 5.2% $1,698,990 0.7% 0.0%

5619 Traffic Control 8.2% $511,583 0.2% 0.0% 5629 Abatement 21.9% $400,000 0.2% 0.0% 6117 Educational curriculum development services 16.7% $57,800 0.0% 0.0%

WEIGHTED DBE BASE FIGURE 26% $253,129,402 100.00% 25.52%

As recommended in the DOT’s “Tips for Goal-Setting”, the CTA weighted the percentages by dividing the Budget Amount for each NAICS category by the total projected FTA funds, as shown in column E. The weighted percentage was then multiplied by the percentage derived from the “DBE firms to all firms” ratio and multiplied by 100 for each NAICS code category (column F). The resulting value for each NAICS code category was totaled to determine the overall base figure for the CTA's 3 year DBE utilization of 26%. The base figure calculation weighs the relative availability of DBE contractors against the relative budget amount of contracting opportunities available for the total pool of contractors in Cook County, Illinois. This concludes the Step One calculation for the FFY 2019-2021 overall goal.

STEP TWO: ADJUSTING THE BASE FIGURE

Once the base figure of 26% was calculated, the CTA determined it was consistent with historical data and the realities of the market in the Cook County Area. As a result, the CTA did not adjust the base figure. The CTA utilized its DBE goal and actual attainment percentages filed with the FTA between FFY 2015-2017 to ensure that the base calculation was consistent with historical data (see Table 3). This information was taken into consideration because it is a likely indicator of participation on future projects, since the types of goods and services contracted by the CTA remain fairly consistent over time. Past participation is the most reliable factor the CTA can use in the Step Two adjustment due to the similarity of the CTA’s federally-funded capital spending in FFY 2016-2018 and forecasted federally-funded capital spending in FFY 2019-2021 and accurately reflects the DBE participation the CTA can expect to attain in FFY 2019-2021. Aside from the disparity study the CTA is currently conducting, the CTA does not know of another disparity or other similar studies comparable to the purchase of goods and services that are unique to a large transit agency operating in the Midwest. However, the CTA continues to examine and address business circumstances within its service area for evidence of recent discrimination that would limit participation by certified DBEs in typical CTA purchases.

Table 3

FINAL STEP: CALCULATING THE OVERALL GOAL

Since the CTA determined that the base figure was consistent with historical data and the realities of the market in the Cook County Area, the result is the CTA DBE goal for FFY 2019-2021 is 26%.

ANNUAL OVERALL DBE PERCENTAGE GOAL = 26% OF TOTAL ESTIMATED FEDERALLY-

FUNDED CAPITAL BUDGET

Fiscal Year DBE Goal DBE Attainment

Race-conscious Race-neutral

2015 25.0% 20.48% 18.04% 2.44% 2016 26.0% 51.47% 10.17% 41.30% 2017 26.0% 25.16% 22.14% 3.01% Total 77.0% 97.10% 50.35% 46.75% Mean 25.7% 32.37% 18.04% 15.58% Median 26.0% 25.16% 16.78% 3.01%

OR

26% OF $253,129,402 = $65,813,645 = CTA’s FFY 2019-2021 OVERALL DBE GOAL

UTILIZATION OF RACE-NEUTRAL (RN) AND RACE-CONSCIOUS (RC) METHODS

The goal of CTA’s DBE Program is to be primarily a race-neutral initiative that incorporates race-conscious elements, as needed. DOT’s DBE Regulations (49 CFR 26.51) require the CTA to meet the maximum feasible portion of the overall goal by using race-neutral means of facilitating DBE participation. The race-neutral measure or program is one that can be used to assist all businesses. For purposes of this submittal, the definition of Race-Neutral includes gender.

Formula for Calculating Race-Neutral and Race-Conscious Percentages

Step #1: Determine the FFY 2015-2017 average of DBE procurements achieved without

contract goals. This is the RN mean.

Step #2: Determine the FFY 2015-2017 average of DBE utilization achieved utilizing DBE contract goals. This is the RC mean.

Step #3: RN mean in FFY 2015-2017 = 15.58% (see Table 3) RC mean in FFY 2015-2017 = 16.78% (see Table 3) RN median FFY 2015-2017 = 3.01% (see Table 3) RC median FFY 2015-2017 = 18.04% (see Table 3)

Step #4: Of the overall goal of 26% DBE participation for FFY 2019-2021 as computed from Steps

One and Two the CTA seeks to achieve 3% by Race-Neutral means and the difference of 23% by Race-Conscious means. This is the percentage the CTA can confirm based on the FFY 2015-2017 achievement.

The CTA will exert additional effort to extend outreach to potential prime contractors to ensure subcontracting opportunities are fully promoted prior to resorting to race-conscious contract goals to achieve the projected FFY 2019-2021 overall DBE Goal.

PUBLIC PARTICIPATION IN SETTING OVERALL TRIENNIAL DBE GOALS

In conformance with the “Public Participation Regulatory Requirements” of the 49 CFR Part 26.45, the CTA held a public comment period for the proposed FFY 2019-2021 DBE goal of 26%. The public comment period began on August 31, 2018. CTA received 3 comments regarding the proposed FFY 2019-2021 DBE Goal and has determined that no adjustment was needed.

Outreach to Minority and Women’s Groups

The following minority, women's, and general contractor support groups were contacted to discuss the CTA's DBE goal as it was being prepared.

• Black Contractors United • Chatham Business Association • Chicago Supplier Minority Development Council • Chicago Urban League • Federation of Women Contractors • Hispanic American Construction Industry Association • Illinois Hispanic Chamber of Commerce • Latin American Chamber of Commerce • Philippine American Chamber of Commerce of Illinois • Women’s Business Development Center • Women Construction Owners & Executives

Advertisements The CTA will issue a Public Notice in general circulation media and at least two minority-focused media announcing that the Overall DBE Goal and Methodology for FFY 2019-2021 is available for inspection on the CTA’s website at www.transitchicago.com/dbe. At the conclusion of the 30 day review period, the CTA will evaluate comments on the goal calculation process and adjust the goal if necessary. The CTA advertised its FFY 2019-2021 DBE Legal Notice in the following newspapers:

• Austin Weekly News* • Chicago Sun-Times • Chinese American News* • Hoy*

*Minority newspaper Written comments on the goal rationale should be addressed to: Chicago Transit Authority Diversity Programs Department 567 W. Lake Street Chicago IL, 60661 Or diversity@transitchicago.com

DBE PROGRAM HIGHLIGHTS FFY 2016-2018

• Introduced Mentor/Protégé Pilot • Identified contracts for SBE Program • Cross Departmental Training

DBE Outreach Participation FFY 2016-2018

• Monthly “CTA Roadshows” at different assist agencies to inform them of contracting opportunities at CTA

• Held monthly “Driving Small Businesses the Distance” workshops • Held multiple MID-Con DBE Outreach events to connect prime and subcontractors • DBE Professional Services/ Enginnering Networking Event • DBE Workshop – Midigating Conflict • Green Line Small Business Education • Your New Blue Small Business Educational Series • Organized “Battle of the Bids” – 20th Annual Transportation Symposium • Attended City of Chicago Annual Vendor Fair • Attended Metra Annual Vendor Fair • Attended Chicago Metropalitain Supplier Diversity Council – Annual Chicago Business

Opportunity Fair • Attended Chicago Park District Annual Vendor Fair • Attended Metropliatian Water Reclomation District Annual Professional Services & the

Construction Contractor Vendor Outreach Fair

The CTA will continue to expand its outreach efforts to inform DBEs about opportunities in order to ensure and achieve its overall DBE goals.

CONCLUSION

The CTA developed an overall DBE goal of 26% (3% Race-Neutral, 23% Race-Conscious) for FFY 2019-2021 pursuant to 49 CFR 26.45 and respectfully submits this goal to the Federal Transit Administration for consideration.

DBE

CHICAGO TRANSIT AUTHORITY

2

DBE

NO OF AFFIDAVITS:

AMOUNT:

PO NUMBER:

ADORDERNUMBER:

PUBLICATION DATE(S): 08/31/2018

State of Illinois - County of

Chicago Sun-Times, does hereby certify it has published the attached advertisments in

the following secular newspapers. All newspapers meet Illinois Compiled Statue

requirements for publication of Notices per Chapter 715 ILCS 5/0.01 et seq. R.S. 1874,

P728 Sec 1, EFF. July 1, 1874. Amended by Laws 1959, P1494, EFF. July 17, 1959.

Formerly Ill. Rev. Stat. 1991, CH100, Pl.

Note: Notice appeared in the following checked positions.

Chicago Sun-Times

Certificate of Publication

Cook

0001068898-01

59.20

Chicago Sun-Times

IN WITNESS WHEREOF, the undersigned, being duly authorized,

has caused this Certificate to be signed

by

Account Manager - Public Legal Notices

CHICAGO TRANSIT AUTHORITY

BOARD SECRETARY OFFICE

567 WEST LAKE STR

CHICAGO, IL 60626

This 31st Day of August 2018 A.D.

Mary Lou Davis

AVISO PÚBLICOEL Programa de Empresa Comercial en Desventaja (DBE) de la Autoridad de Tránsito de Chicago (CTA)

Objetivo en General Propuesto y Metodología para los Años Fiscales Federales 2019-2021 y el Objetivo delProyecto Fase Uno Modernización de las líneas Roja y Púrpura (RPM)

Este anuncio servirá como aviso del objetivo general de 26% del DBE propuesto por la CTA para contratosasistidos por el Departamento de Transportación de los Estados Unidos (USDOT) por un período de tresaños para los Años Fiscales Federales (FFY) 2019-2021 y el objetivo de 20% del proyecto Fase Uno RPM.

El objetivo general está expresado como un porcentaje de fondos federales que la CTA proyecta utilizardurante los Años Fiscales Federal 2019-2021. La metodología utilizada para este objetivo está de acuerdocon las Regulaciones de USDOT tituladas “La Participación de las Empresas Comerciales en Desventajaen los Programas de Asistencia Financiera del Departamento de Transporte”, Código 49 de RegulacionesFederales Parte 26. El objetivo anual se establece para realizar “igualdad de condiciones” para que lasempresas DBE puedan participar en contratos de la CTA con asistencia federal.

El reporte del objetivo general y metodología del DBE de la CTA para los Años Fiscales 2019-2021 y elreporte y metodología del objetivo del Proyecto la Fase Uno RPM estarán disponibles en el sitio web de laCTA (transitchicago.com/dbe) durante 30 días desde el 31 de agosto de 2018 hasta el 30 de septiembrede 2018. El público puede revisar y proporcionar comentarios sobre el objetivo general del DBE durante30 días. Los comentarios públicos serán aceptados en la dirección y el correo electrónico que figuran acontinuación a partir del 31 de agosto de 2018 y terminarán el 30 de septiembre de 2018.

Chicago Transit AuthorityDiversity Department

Attn: DBE Liaison Officer567 West Lake, 4th Floor

Chicago, IL 60661diversity@transitchicago.com

The Chicago Transit Authority’s (CTA) Diversity Programs Department is pleased to announce that you are cordially invited to attend our Open

House: This event is regarding our submission to the FTA for our Disadvantaged Business Enterprise (DBE) Triennial Goal. Please come

out and join us and learn about our plans for the next three years.

PLEASE JOIN US!

Friday September 14, 2018 10:00 A.M. – 12:00 P.M.

CTA HQ-Conference Room B & C

567 West Lake Street

Chicago, IL 60661‐1465

Please register at the link below: https://www.eventbrite.com/e/cta-

triennial-fta-dbe-goal-open-house-

tickets-49696087335

RSVPs are encouraged for

headcount purposes.